Accelerate your Diversity & Inclusion efforts by following these five steps

Diversity is a business imperative when it comes to winning the ‘20s. The past has taught us that succeeding with Diversity and Inclusion (D&I) is not straightforward. If leaders are committed to stepping up their game and accelerating change, we must understand how diversity fuels competitiveness, how to craft an inclusive culture where diversity thrives, and how to best lead a diverse workforce.

Accelerate the D&I Effort by Concretizing Value and Fully Anchoring in Business

Companies will have to become more targeted in their approach, beginning by defining the desired business value that increased D&I should yield. We propose that companies craft their D&I strategy by following these five steps:

1. Set the vision
2. Define the scope
3. Set the targets
4. Decide on actions
5. Ensure strong governance

I. Setting the vision.

The key is to formulate a D&I strategy that emphasizes value growth in the form of clear business outcomes with a clear foundation in the overall purpose and commercial strategy of the company. Engagement and input from top management in the vision-setting is crucial to securing leadership buy-in, necessary resources, and long-term prioritization. A clear definition of the intended value from D&I is the strongest starting point for both reviewing current D&I efforts and adjusting efforts to maximize results.

One example would be a large European pharmaceutical company that views D&I as a key driver for its innovation and quality assurance. It does this by leveraging D&I to create a workspace where people are empowered to share opinions and challenge established thinking.

II. Defining the scope.

This step includes identifying key stakeholders and moments of truth that must be tackled. The company should consider all stakeholders in its end-to-end operations, how improving D&I would be relevant for these groups, and where the moments of truth—where diversity is either secured or lost—are (as outlined above).

If a company wants, for example, to leverage D&I to improve sales to specific customer segments, it is vital to assess its diversity in sales and/or marketing. Diversity needs to be secured in the departments related to the business challenges; places where diversity will be an enabler of success.

III. Setting the targets.

Companies must define end goals through concrete KPIs and targets to determine “what good looks like.” As with Setting the Vision and Defining the Scope, specificity is something to be stressed. The “right” KPIs and tracking methods will be crucial to driving the desired progress. KPIs must be specific to selected stakeholder groups and clearly linked to the overall business objectives. Benchmarking both internally and externally against comparable industry players can be valuable in assessing competitiveness and status. Allowing for different ambition levels of the various KPIs (such as reaching top quartile on some, but settling for industry average on others) will allow the company to focus its approach and emphasize the areas that are considered most important.

As an example, a large consumer company in the Nordics had very limited diversity among employees with technical expertise. It developed concrete KPIs specifically for this group. As more diversity was added, the supply of new products increased. Today, the company credits improved D&I with the increased innovation and creativity.

IV. Choosing Initiatives.

A key task is to prioritize potential initiatives and develop action plans tailored to specific moments of truth. It is important to involve key stakeholders and employees in identifying the moments and situations that need work, and then in developing initiatives. When prioritizing, the company must be selective and focus on initiatives with the highest anticipated impact and executional certainty.

A Nordic consumer company had a low share of females in its higher ranks. It instituted a new push for D&I, and one of its first actions was an anonymous survey of 800 leaders across the organization to harvest information about attitudes toward diversity and underlying root causes of the lack of diversity. This allowed the company to prioritize and implement concrete initiatives to alleviate the underlying challenges.

V. Ensuring strong governance.

It’s crucial for progress and value realization to plan your governance strategy before executing it. Dedicated program sponsors from top management are essential to ensure it is prioritized, and there must be sufficient participation from owners outside the HR department to confirm a clear connection to business and accountability throughout the organization. Clear ambition deadlines for implementation of interventions and target realization are required.

Recently, a global consumer company implemented executive incentives to ensure accountability from the top. Beginning in 2021, executive compensation will be linked to progress on 2025 D&I targets.

Diversity and inclusion aren’t only about doing good, but about doing well as a business. Companies that manage to leverage diversity as a business strength will enhance their competitiveness in this decade and beyond. Don’t hesitate to reach out if you would like to discuss the topic further.

At BCG we are committed to D&I internally as much as we are in the dialogue with our clients. With the report “Finding the Value in Diversity: D&I Isn’t Just a Fix. The business imperative of diversity and inclusion in the Nordics” we look forward to a joint conversation on the status in the Nordics and how to keep moving forward.

This is the fifth out of five articles we share here on LinkedIn. For the other articles in the series, please follow my colleagues B?rge Kristoffersen, Kaori Uehigashi, Matias Pollmann-Larsen and Thomas Jensen.